Investigating the efficacy of inventory policy implementation in selected state-owned enterprises in the Gauteng province: A qualitative study

Abstract

Scholars, such as Bowersox, Closs and Cooper (2010:159) and Jalali and Nieuwenhuyse (2015:1217), describe inventory policies as the tools that inform inventory decisions of organisations with respect to what, how much and when to purchase and manufacture. According to Mo, Tseng and Cheung (2014:1296), an inventory replenishment policy guides inventory practitioners on how to Background: The formulation, implementation and evaluation of inventory policies are vital for adequate management of inventory in organisations to ensure seamless flow of inventory and customer satisfaction. Inventory policies offer the required guidelines on how inventory should be managed in organisations to attain inventory management goals. However, it is unclear whether these guidelines are efficaciously implemented to enhance the inventory management performance of Eskom and Transnet in the Gauteng Province. Objective: This study sought to investigate the efficacy of inventory policy implementation at each of the selected SOEs in the Gauteng Province. Method: The study employed a qualitative research design with a sample of twenty-four inventory staff, of which fifteen were from SOE1 and nine from SOE2. The sampled population (inventory staff) were selected purposefully at each SOE in the Gauteng Province. Data were mainly gathered by means of semi-structured interviews and were thematically analysed. Results: The study generated four themes that reveal the extent of inventory policy implementation and its associated impact on inventory costs at each SOE. These themes included adherence to inventory policy, inventory policy violations, implementation extent of inventory policy, inventory growth rate and the associated increase in inventory carrying costs and lack of inventory planners’ planning skills. Conclusion: Inventory policies were not fully implemented at each SOE. Poor inventory purchasing decision and violation of inventory policies contributed to inventory growth rate and excess inventory carrying and its associated costs. This therefore negatively affects the inventory management performance of SOE 1 and SOE 2.